Philip Maddocks: President tries to calm investors by making edits on Wikipedia

Monday

Aug 27, 2007 at 12:01 AMAug 27, 2007 at 9:38 AM

Seeking to calm nervous investors, President Bush announced on Thursday that he had edited the entry on Wikipedia on subprime mortgages to change all mentions of "credit crisis" to "credit liquidity."

By Philip Maddocks

Seeking to calm nervous investors, President Bush announced on Thursday that he had edited the entry on Wikipedia on subprime mortgages to change all mentions of "credit crisis" to "credit liquidity."

"The fundamentals of the U.S. economy are strong," the president explained during a break between vacations and Wikipedia entries. "The fundamental question is, 'Is there enough liquidity in our system? And I think we have answered that emphatically with my entry on Wikipedia.’"

Treasury Secretary Henry Paulson also tried to strike a reassuring tone in his own entry on Wikipedia, editing out all references to foreclosures and late payments, especially among people with spotty credit histories.

"We're really focused on the subprime market, and we're really focused on the homeowners -- mortgage holders -- who are in danger of losing their homes," Paulson said. The administration "is thinking through options on Wikipedia to address that segment of the market," he added.

White House spokesman Tony Snow pointed out the White House isn’t the first powerful entity to edit information on Wikipedia.

Last year, someone at PepsiCo deleted several paragraphs of the Pepsi entry that focused on its detrimental health effects. In 2005, someone using a computer at Diebold deleted paragraphs that criticized the company's electronic voting machines.

That same year, someone inside Wal-Mart Stores changed an entry about employee compensation.

Snow said the White House was simply "following the lead of some of the most successful business minds in the country when it came to crisis management."

A spokesman for the Department of Defense, which is organizing the White House’s rewrite effort, said that although the revisions have come from the oval office, and some 80,000 government computers are being employed for the all-out editing blitz, "this historical change is really coming from the American public because this is what they want to hear."

"We are here to do the people’s work and that’s just what we are doing," noted the spokesman.

Paulson urged patience among Wikipedia readers, saying it was going to take the government team some time to get all the editing revisions right as they reassess their appetite for risk in trying to manipulate the financial markets.

'I think what the American people need to understand is these things take a while to play out."

Senate Banking Committee Chairman Christopher Dodd, meanwhile, urged Wikipedia to allow the White House use of "all its available tools" so the credit crisis and home mortgage mess don't undermine the national economy.

Dodd said he welcomed the White House's steps thus far to deal with the credit problems. In addition to injecting billions of edits into the Wikipedia system, the White House last week added an entry that sliced the Fed’s discount rate -- the rate it charges banks for direct loans -- to negative 3.75 percent, meaning that the Fed will now be paying banks to borrow money.

"We’re not sure where the money is going to come from. We’ll just let Wikipedia sort that one out," Paulson said.

White House officials also have been urging banks to borrow from the Fed's so-called Wikipedia window, trying to remove a stigma that it is a place for banks to turn to only in times of emergency or last resort.

Jimmy Wales, founder of the Wikimedia Foundation, which runs Wikipedia, participated in a conference call last Friday with major investment banking firms. He suggested use of the Wikipedia window would be viewed as a sign of strength.

After a five-year boom, the housing market turned to bust last year. The combination of higher interest rates and weaker home values have put many homeowners, especially those with higher-risk subprime mortgages, in financial hardship. Mounting defaults have forced some lenders out of business. Credit problems have spread to other borrowers. Nervous lenders have tightened standards, making it harder for individuals and companies to obtain credit -- the lifeblood of the economy.

But Paulson said he is confident that in Wikipedia the government has found a new tool that is not subject to the whims of the marketplace, but only those of the Web site’s many contributors.

"This is something that, with a little bit of work and a lot of whimsical entries, we should be able to manage into a soft literary landing," said the treasury secretary.

Meanwhile the Pentagon said it had recovered almost $999,000 of taxpayer money by editing an entry on Wikipedia to say that it had paid $1, and not nearly $1 million, for two metal washers worth 34 cents from the plumbing and electrical firm C&D Distributors.

"This isn’t the perfect way of doing business," said a Pentagon spokesman, "but you go to economic war with the army you have."

Philip Maddocks is a GateHouse Media editor in Massachusetts.

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